Ukraine: news bulletin end August - first days of September

Nieuwsbericht | 02-09-2022 | 20:00

Government and policy

• Ukrainian government develops and introduces all the legislation necessary for work of newly created associations of water users with the aim to ensure effective functioning of  irrigation systems.

• The Ministry of Environmental Protection and Natural Resources of Ukraine published its report with estimated environmental damage caused by Russian military aggression at UAH 395 billion over six months.  According to the report, in particular, losses as a result of air pollution amounted to UAH 176 billion, water resources UAH 106.3 billion, and soil - UAH 8.8 billion.

• Three weeks since the launch of the State Agrarian Register (SAR), more than 5,000 farmers have already registered in it to be able receive funds under support programs. Only companies with Ukrainian founders are liable for this support.

• The Ministry of Finance of Ukraine supports the proposal of the Ukrainian Agrarian Council (UAC) to exempt from paying a single tax the farmers registered under the 4th tax group if their land plots are located on the territories temporarily occupied by the Russians. The single tax payers of the fourth group include agricultural producers, if the share of agricultural commodity production is equal to or exceeds 75%.

International support

• The United Nations Development Programme (UNDP) in Ukraine signed a memorandum of understanding with the Ministry of Agrarian Policy and Food of Ukraine to cooperate on increasing the competitiveness of Ukraine’s agriculture sector.  The cooperation will involve the development and promotion of digital tools, improving access to green financing for Ukrainian agriculture producers, and promoting environmental, social and governance (ESG) principles of management.

• Switzerland will allocate 2.5 million francs  to support dairy producing farms in the regions affected by hostilities in Chernihiv, Kyiv and Sumy regions. interested milk producers in the affected areas will receive means for washing and disinfecting milking equipment, pre- and post-milking udder treatment, wipes for udder hygiene, gloves, reagents for detecting hidden forms of mastitis, disinfectants for livestock premises, etc., which will fully cover their quarterly needs.

• Germany and Japan will allocate more than 60 mln. USD for construction of temporary and long-term grain storages in Ukraine.

• FAO will provide up to 30,000 tons of winter wheat seeds to farmers in war-affected regions of Ukraine. The Food and Agriculture Organization of the United Nations (FAO), with the financial support of the Government of Japan, will provide two tonnes of winter wheat seeds for 1,500 farmers each from seven regions of Ukraine, who cultivate plots with a total area of no more than 50 hectares from the regions affected by the aggression of the Russian Federation: Donetsk, Dnipropetrovsk, Zaporizhia, Mykolaiv, Odesa, Sumy and Kharkiv regions. Each of the 1,500 selected recipients of the allowance will receive two tonnes of winter wheat seeds in containers of 50 kg. Preference will be given to farmers with documented damage caused by the Russian invasion of Ukraine. Farmers will have to pick up seeds themselves from distribution points established by FAO in each of the seven regions.

International trade

• In August, Ukraine exported 4.6 mln. tons of agricultural produce via all the routes. This is to be compared with 2.8 mln. tons in July, before launching the Grain Initiative  On August 30, the Administration of Sea ports of Ukraine reported about 61 ships that left the Black Sea Ports within the Grain Initiative with 1.5 mln.tons of produce (1.3 mln.tons in the other sources).

• 2022 - agricultural export data dashboard was produced and will be regularly updated by the Ministry of Agrarian Policy and Food, Ministry of Infrastructure, and Export Promotion office 

• Please see the updates of the work of the Grain Initiative at the webpage of the UN Grain Initiative Coordination Center:  Black Sea Grain Initiative | Updates | United Nations;

• Movement of ships is to be followed on a special page of the Coordination center:  https://www.un.org/en/black-sea-grain-initiative/vessel-movements - contains information also about the ships that went to the Netherlands.

• Exports of tomato paste from Ukraine in 2021/22 (marketing year, July-June) amounted to 62,180 tonnes, which is 45% (or 27,980 tonnes) less than the previous year. The main reason for this reduction was the Russian occupation and hostilities in Mykolaiv and Kherson regions, where the largest Ukrainian tomato paste producer, the Agrofusion agricultural holding, is located.

• Poland and Ukraine will create a working group that will present options for localizing a project to build a cross-border pipeline for transporting vegetable oils from Ukraine to the port of Gdansk (wnp.pl)

Sector news

• The National Institute of Potato Breeding forecasts that there will be sufficient supply of potatoes of local production. despite the fact that areas under potatoes at the professional producers are 30% less than in the previous year. According to their estimations, the increased costs for logistics and reduced purchasing capacity of the population will make imports not feasible.

• Ukrainian farmers experience the lack of fruit and vegetable storage capacity. Many of the existing storage facilities are now on the occupied territories.  

• During the six months of the war, almost 3 million hectares of forests have been damaged, which is one third of its forest fund, the losses caused to the flora and forests have increased to approximately UAH 183 billion, according to the Minister of Environmental Protection and Natural Resources of Ukraine.

• Ukrainian farmers collected a very good harvest of apples, but the prices are 35% lower than this time last year. The demand for apples dropped since the beginning of war and demand for summer apples was significantly lower.

Grains and food security

• In this marketing year, Ukraine expects to export about 65-70 million tons of grain and oil crops. These are 22 million tons of leftovers from the last harvest and 38-43 million tons of this year's harvest. The domestic consumption in Ukraine is about 20 million tons.

• According to  Mr. Vysotsky, First Deputy Minister of Agrarian Policy and Food of Ukraine today the optimal level of utilization of the capacities of highways, river ports and railways has been reached - about 3 million tons per month. And the Ministry of Agricultural Policy is currently working on expanding the volume of cargo that goes through the grain corridor of sea ports, as well as through the railway.  The goal is 5-6 million tons of total export of agricultural products per month [for the seaports], as it was before the war.   Major crops exported today are corn, wheat, sunflower oil, and rapeseed.

• Currently, almost 25 million tons of grain have been collected, and 60% of the sown areas have been cultivated. So far, the collection of wheat (more than 19 million tons), barley (5.5 million tons), rapeseed (about 3 million tons) has already been completed. Harvesting of soybeans, sunflowers and corn begins. According to the forecast, Ukraine will harvest 10 million tons, 3.5 million tons, and 27 million tons, respectively. Farmers have already started sowing winter crops. A fairly good focus of their attention is on rapeseed - the area under it will not decrease, but areas under winter wheat will be decreased.

Company news

• Ministry of Agrarian Policy of Ukraine expressed their appreciation and gratitude to the Dutch-owned Kyschentsi farm and personally to Kees Huizinga for becoming the voice of the Ukrainian farmers at the international platforms, explaining the life of Ukrainian farmers to the people around the world, but also for attracting international support. They made a video about Kees Huizinga and Kyschentsi.

• At an extraordinary meeting on September 23, the Board of Directors of the agro-industrial group Kernel intends to allow an increase in the charter capital in the amount of up to $5.704 million in the next five years through an additional issue of up to 216 million shares.

• Agro-industrial group Astarta, the largest sugar producer in Ukraine, has completed the harvesting of early grain crops, a total of 285,000 tonnes of crops have been harvested, of which 265,000 tonnes of winter wheat and 19 tonnes of winter rapeseed.

• EBRD supports $8 million food security loan to Ukraine agribusiness firm Astarta EBRD takes on 60 per cent of risk, or US$ 4.8 million, through agreement with UKRSIBBANK

• Agricultural holding Continental Farmers Group (CFG) has completed the harvest of winter barley, wheat and rapeseed from a total area of 86,200 hectares, a total of 446,000 tonnes of crops have been harvested, follows from its press release on Thursday. CFG grows potato chips, seed and food varieties in the Lviv and Ternopil regions. The total area under potatoes in 2020 amounted to 1,600 hectares, in 2021 – 1,800 hectares

• Kulynychi LLC (Kharkiv region), a major manufacturer of bread and bakery products, has begun construction of a bakery in the Lviv region with a capacity of up to 150 tonnes of bread per day, part of which will be sold for export. Investments in the enterprise will amount to EUR 20 million over two years, part of the equipment for the plant will be transported from the Kulynychi plant in Kharkiv region. The production facility in the Kharkiv region will be also running.